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Why Downpayment Money? And Nine Other FAQs From HIP Homebuyers.

May 23, 2016

If you shout, “Downpayment money!” from the rooftops, you’re bound to get people’s attention. Especially homebuyers. Since a home is the biggest purchase most people will make in their lifetime, downpayment money is something that gets the welcome mat rolled out rather quickly.

But downpayment money, which our Home Is Possible (HIP) program offers to qualifying low and middle income Nevada homebuyers, does beg a lot of questions. Don’t worry, we have lots of answers.

1. Why is HIP a thing?

In 2014, a star was born (aka HIP). It was developed to help the Nevada Housing Division (NHD – lots of acronyms, we know!) help achieve its mission: To provide affordable housing opportunities and improve the quality of life for Nevada residents. HIP helps families that can afford the monthly mortgage payment but may be strapped for cash to cover the down payment and/or closing costs.

Since the program started, we’ve given more than 6,100 families a total of $47 million in downpayment money. Not too shabby!

2. Is downpayment money really free?

In a word, yes. Home Is Possible helps homebuyers just like you to get up to 5% of the home loan value—for free. There’s no repayment for the downpayment money you get through HIP—ever.

3. What’s the catch?

There isn’t one. Using HIP is quite possibly the least amount of effort you can put forth to receive thousands of dollars in downpayment money. (Your lender handles most of the details. Sweet, right?) Here are a few boxes to check off:

  • Qualifying income must be below $95,500

    • Home price below $400,000
    • Minimum credit score of 640
    • Homebuyer must live in home as primary residence
    • Homebuyer education course required 
    • Must meet standard underwriting requirements

4. Which Nevada counties are HIP-friendly?

Good county lines may make for good neighbors, but every county in Nevada is eligible for HIP.

5. Can I give my application to NHD right now? Pretty please?

NHD runs the HIP program, but we don’t personally take applications. Instead, HIP-qualified lenders are the well-trained experts you need to get the HIP downpayment money ball rolling. You’ll find them on our website.

6. What if I want to hang my hat in a condo or manufactured home?

Eligible HIP properties include 1-4 unit (detached or attached) condos, townhomes and manufactured homes. Normal loan program underwriting guidelines still apply. (See FAQ #3). Also, you need to occupy the home within 60 days of closing.

7. If my credit score is just a smidge below the 640 required, can I still be approved?

We have to draw the line somewhere and 640 is where we draw it. However, if you’re close, there are ways to improve your credit score to help you cross that line. There are countless online resources to guide you, plus your lender can help lead the way to 640.

8. Can I beef up the already-generous downpayment money?

Yes, you can bring additional funds to the party.

9. What kind of home loan do I need to play nicely with HIP?

The HIP program can be used with FHA, VA, USDA-RD (more acronyms!) and conventional loans.

10. What’s the deal with the homebuyer education course?

Whether you’re a seasoned homebuyer or a newbie, there’s always something new to learn. We require our homebuyers to take a homebuyer ed class to help set you up for success. And it must be working, because NHD loans are two times less delinquent than all housing authorities in the nation. Way to go Nevada!

There are a number of options for taking the class. Find the option that’s right for you.

So there you have it: Answers to the top 10 FAQs. Have other questions? Please don’t hesitate to contact us. We’re here to help. That’s our thing. 

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